Applied Rationality focuses on public policy issues and tries to take a liberal perspective that is consistent (comments to the posts will often show otherwise) with neoclassical, rational-choice economics.

Monday, February 8, 2010

Sometimes the free market isn't such a wonderful thing

While Republicans and Tea Partiers vilify health insurance reform, the bad practices of insurers continue. It's important to remember that this is the status quo that they are fighting for tooth and nail.

President Obama's secretary of health and human services fired off a sharply worded letter to a California insurer Monday, demanding to know why it is raising rates for individual policyholders by as much as 39 percent.

The unusual salvo offers a reminder that, even as health-care legislation lies in limbo in Washington, the battle over surging health care costs continues in other venues.

Anthem Blue Cross of California sent out notices earlier this month to many of its roughly 800,000 holders of individual policies, informing them that the costs of their plans would sharply increase to cover rising health-care costs. The increases do not affect employer-provided plans in the state.

Handsoffourhealthcare so that insurance companies can jack up our premiums by a third doesn't seem like such great rallying cry.